Compilation Engagement vs Bookkeeping: What Does Each Include?

Quick answer. Bookkeeping records your transactions, accounting review checks them, and the compilation engagement ends with a compilation attestation (professional standard NP 2300). This attestation is reserved to chartered accountants (experts-comptables) registered with the French professional order and strengthens your credibility with banks and third parties. All three engagements require a written engagement letter.

Many business owners confuse bookkeeping, accounting review, and compilation of annual financial statements. These three services address different needs and offer distinct levels of professional assurance. Since the decree of September 1, 2016, the compilation engagement has been governed by professional standard NP 2300, which standardizes the procedures and format of the attestation. Understanding these distinctions helps you select the service that matches your business size, sector, and stakeholders' requirements (banks, creditors, partners).

Bookkeeping: Recording and organizing transactions#

Bookkeeping involves recording, month by month, each transaction (purchases, sales, expenses, capital assets) in your accounts according to the general accounting plan. The accountant or accounting firm:

1. Receives your supporting documents (invoices, bank statements, payroll records)
2. Records each entry in the appropriate account
3. Ensures the formal accuracy of documents
4. Prepares tax and payroll filings (VAT, payroll)
5. Closes the final result at year-end

This engagement is essential for every business owner, but it does not include an official attestation. It is primarily an administrative and accounting management service.

Accounting review: Verification and validation#

Accounting review often complements bookkeeping. The chartered accountant:

1. Verifies the consistency and reasonableness of recorded transactions
2. Tests compliance with applicable accounting principles
3. Performs analytical procedures (bank reconciliations, trial balance analysis)
4. Records year-end adjusting entries (provisions, depreciation, accruals)
5. Drafts the notes to financial statements
6. Prepares the final accounts (balance sheet, income statement, notes)

As internal cabinet work, accounting review does not, by itself, produce a separate attestation. It differs from the limited examination (standard NP 2400), a distinct assurance engagement that does issue a limited-examination report.

Compilation engagement: Moderate assurance and formal attestation#

The compilation of annual financial statements (professional standard NP 2300) is the most common engagement. Its purpose is to allow the chartered accountant to express that he "has not identified any items that would undermine the consistency and reasonableness of the annual financial statements." At the conclusion, the chartered accountant issues a compilation attestation.

The engagement procedures are based on:

1. Information provided by management: accounting data, explanations, written confirmations
2. Professional expertise: application of accounting techniques, verification of formal compliance
3. Analytical procedures: assessment of the consistency and reasonableness of the financial statements as a whole

Unlike a full audit (called "contractual audit" or "statutory audit" when required by law), the compilation engagement involves less extensive procedures, hence the term "moderate assurance." Nevertheless, it remains a formal engagement governed by French law (Ordinance no. 45-2138 of September 19, 1945).

All three engagements require a written engagement letter (Article 151 of the chartered accountants' code of ethics), setting out the scope, fees, and responsibilities of each party.

This is critical: issuing a compilation attestation is reserved to chartered accountants registered with the French professional order (and to authorized employees acting under their responsibility, under articles 83 ter and 83 quater of Ordinance no. 45-2138). An unregistered independent bookkeeper or software cannot issue it.

A salaried bookkeeper, accounting technician, or software cannot issue such an attestation—it would have no legal standing with banks, government agencies, or business partners.

Why does an attestation enhance your position?#

Banks, landlords, creditors, and business partners receive financial statements from hundreds of companies annually. An attestation from a registered chartered accountant signifies that:

• The statements have been reviewed by an independent professional subject to ethical rules and professional liability
• No material misstatements have been identified
• The figures presented faithfully reflect the company's economic and financial position

This transforms your financial statements into a credible reference document, far more trustworthy than an internally prepared one.

When should you opt for a compilation engagement?#

Typically, a compilation attestation is warranted if:

• You are seeking bank credit or external financing
• Commercial partners require audited or attested financial statements
• You are seeking investors or potential buyers
• Your legal status mandates it (certain public companies, endowed foundations)
• You wish to reassure creditors or employees

Microenterprises (sole proprietors)#

If your income is modest and you are not seeking credit, self-managed bookkeeping via software suffices. However, as you approach VAT registration thresholds (€37,500 for services), a compilation engagement can improve your creditworthiness.

Limited Liability Companies (SARLs) and Corporations (SAS)#

For small to mid-size SARLs, bookkeeping plus review is standard. A compilation engagement is added if banks require it or if you pursue external funding.

Professionals and freelancers#

Many professional practices (medical offices, law firms, architectural practices) combine bookkeeping and review, or add a compilation engagement if they need to refinance or strengthen credibility with institutional partners.

Confusing review with audit#

Accounting review is not an audit. A statutory or contractual audit (also called a reasonable assurance engagement) involves far more rigorous verification and is mandatory for certain legal entities above prescribed thresholds. If unsure which to choose, consult resources on choosing between a chartered accountant and auditor (commissaire aux comptes).

Waiting too long to decide#

Your choice of engagement should be made at the outset of your relationship with your accountant. Switching from bookkeeping to a compilation engagement mid-year can be administratively burdensome.

Overlooking that attestation authority is restricted#

A cost-conscious business owner might be tempted to work with an unregistered accountant. However, only an attestation from a registered chartered accountant will be accepted by banks and government agencies.

At Hayot Expertise, we have guided many small and mid-sized enterprises through this choice. One example: an operations manager at a small manufacturing firm approached us after facing rejection from multiple banks. His accounts, though well-maintained by a competent bookkeeper, were deemed insufficiently credible because they lacked an expert accountant's attestation. Once he adopted a compilation engagement, the same financial statements were accepted within weeks.

This illustrates a tangible fact: this is not merely administrative formality, but a genuine gateway to financial opportunity. As a registered chartered accountant and statutory auditor, our attestation engages our professional liability and ethics—this is what grants it value with third parties.

Hayot Expertise advice. If you anticipate seeking external capital, refinancing, or a business sale, plan for a compilation engagement well before fiscal year-end. This will save bureaucratic delays and enhance your credibility with financial partners. Consult our accounting review services to identify the solution best suited to your business size and industry.